Weekend Trading Review: $SPY $IWM $QQQ $COMPX $SEDG $PSX $CAI

The markets confirmed uptrend continues as the Dow, S&P, Nasdaq and Nasdaq 100 posted all-time closing highs on Friday. The Russell 2000, which ignited this current charge in the markets, finished lower this week and is in the midst of a five week consolidation on the heels of its big September advance. It has paid to be long, but it also pays to pay attention. Despite the march upward, the Nasdaq, Nasdaq 100 and Russell 2000 have now printed four distributions day within the last 20 sessions. A fifth such day early next week would raise some caution flags for us. That said, the S&P 500 has not shown the same concern as it has only flashed one distribution day over the last month of trading. As we mentioned last week, there will always be these types of cross currents in the markets. The best way to stay out of trouble is to always keep your eye on the ball when it comes to the major indices, reserve your trading for the best opportunities to avoid over trading, honor your stops and keep losses manageable. Additionally seeing it is earnings season, try to avoid big earnings gambles by initiating or taking full positions into or just ahead of reporting dates. A look at stocks like KEM, UCTT, ACIA, CC, STMP, DATA and P will show you what may happen should you dare.

As far as the TTP portfolio is concerned, we have pretty well honored our rules pertaining to earnings and it has resulted in fewer trades lately as we have had to pass on many set ups. That said, our rules have been good to us to this point. Despite a small draw down over the last couple weeks, we continue to outpace the S&P 500 with a return of  21.72% in 2017 versus 15.62% for the S&P. At the bottom of our article today is the link for our year to data trading portfolio. With that, let’s head to the charts.

S&P 500– Well, not a lot to add at this point. A picture is worth a thousand words at the chart below speaks volumes. After a quick trip down last Wednesday, the index recovered quickly and ran to new highs once again. That sell off on October 25th registered the only distribution day for the S&P over the last 20 sessions. However, sudden sell-offs don’t always pre-announce themselves in a series of distribution days. A market such as this that is extended could take a big hit on some unforeseen news so never get to caught up in the moment, remain level headed and keep position appropriate.


NASDAQ- The Nasdaq Composite shook of some selling as well last week with a large gap up on Friday aided by some big earnings reports from big cap tech companies. It built on that momentum this week by adding nearly one percent easily notching a new all-time closing high. The concern here, if any, is the four distribution days the index has recently registered. As such, we will be keeping a close watch on trading next week for any additional selling.


IWM- The Russell 2000 continues to take a breather as the other industries played catch up and as a result is now the only index of the four we cover here not in all-time high territory. The consolidation has been fairly constructive but we have taken note of the four distribution days the index has racked up recently as well as the bearish outside day the index printed on November 1st. A break to new highs next week would be a welcome sign.


QQQ- The recent recovery in large cap tech, which had been lagging in September and October, has been somewhat impressive. The index has now posted six straight up weeks, but does have four recent distribution days on its resume. However, on of those days will come off the count mid-week next week. Additionally, we mentioned last week that broad participation outside of the highly weighted stocks within the index was lacking and that remains somewhat of a concern.


SEDG– SolarEdge continue to melt upward for us and we are now up over 57% on our remaining shares. Solar stocks have regained some momentum recently after a big earnings report from First Solar. SEDG will announce there results next week and hopefully they will be met with the same excitement. Since we have paired our positon down already there is nothing for us to do prior to the release. We have inched our stop up to near $29.75 and hopefully a big upward reaction to earnings will enable us to move that stop up even further.


CAI– The stock has been drifting down in a consolidation mode digesting its recent big move post earnings. We locked down swing gains of 14.42% so far and are currently up over 22% on the balance of our position. We are also waiting on the closing of a secondary offering the company announced a couple weeks ago. We keep our stop near $33.50.


PSX- Our newest trade is a long position in Phillips 66. We entered the trade on 11/2 at a price of $93.13 and have a $100 swing trade profit target. Our initial stop was near $89.65 and we inched that up slightly now to $89.75. Energy stocks have been picking up a bit of steam and refiners like Phillips have been particularly strong. Earnings are out of the way so we have a nice window of time to let the trade work.


That’s all for now. Enjoy the rest of your weekend and be careful out there!


2017 Hypothetical Portfolio


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